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Description / Instructions: Complete the following Week 5 Assignment in WileyPLUS: * Exercise 7-3 * Exercise 12-1 * Exercise 12-8 * Problem 12-9A * Problem 12-10A * Exercise 13-3 * Exercise 13-4 * IFRS 13-1 * Problem 13-2A

Exercise 12-1

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Question 1

Putnam Corporation had these transactions during 2014.

Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating activities, investing activities, financing activities, or noncash investing and financing activities.

(a)	Purchased a machine for $30,000, giving a long-term note in exchange.	[removed]

(b)	Issued $50,000 par value common stock for cash.	[removed]

(c)	Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.	[removed]

(d)	Declared and paid a cash dividend of $13,000.	[removed]

(e)	Sold a long-term investment with a cost of $15,000 for $15,000 cash.	[removed]

(f)	Collected $16,000 of accounts receivable.	[removed]

(g)	Paid $18,000 on accounts payable.	[removed]

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Exercise 12-8

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Question 2

Shown below are comparative balance sheets for Schmitt Company.

SCHMITT COMPANY Comparative Balance Sheets December 31
Assets	2014		2013
Cash	$ 68,000		$ 22,000
Accounts receivable	88,000		76,000
Inventory	167,000		189,000
Land	80,000		100,000
Equipment	260,000		200,000
Accumulated depreciation—equipment	(66,000	)	(32,000	)
Total	$597,000		$555,000
Liabilities and Stockholders’ Equity
Accounts payable	$ 39,000		$ 43,000
Bonds payable	150,000		200,000
Common stock ($1 par)	216,000		174,000
Retained earnings	192,000		138,000
Total	$597,000		$555,000

Additional information:

1.		Net income for 2014 was $93,000.
2.		Depreciation expense was $34,000.
3.		Cash dividends of $39,000 were declared and paid.
4.		Bonds payable amounting to $50,000 were redeemed for cash $50,000.
5.		Common stock was issued for $42,000 cash.
6.		No equipment was sold during 2014.
7.		Land was sold for its book value.

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Prepare a statement of cash flows for 2014 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000)).

SCHMITT COMPANY Statement of Cash Flows For the Year Ended December 31, 2014
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Adjustments to reconcile net income to
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Compute these cash-based ratios: (Round ratios to 2 decimal places, e.g. 2.56.)

(1) Current cash debt coverage.

Current cash debt coverage

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times

(2) Cash debt coverage.

Cash debt coverage

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times

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Exercise 13-3

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Question 3

Here is financial information for Spangles Inc.

	December 31, 2014	December 31, 2013
Current assets	$106,000	$ 90,000
Plant assets (net)	400,000	350,000
Current liabilities	99,000	65,000
Long-term liabilities	122,000	90,000
Common stock, $1 par	130,000	115,000
Retained earnings	155,000	170,000

Prepare a schedule showing a horizontal analysis for 2014, using 2013 as the base year. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)

SPANGLES INC. Condensed Balance Sheet December 31
			Increase or (Decrease)
	2014	2013	Amount	Percentage
Assets
Current Assets	$106,000	$90,000	$[removed]	[removed]	%
Plant assets (net)	400,000	350,000	[removed]	[removed]	%
Total assets	$506,000	$440,000	$[removed]	[removed]	%
Liabilities
Current Liabilities	$99,000	$65,000	$[removed]	[removed]	%
Long-term liabilities	122,000	90,000	[removed]	[removed]	%
Total liabilities	$221,000	$155,000	$[removed]	[removed]	%
Stockholders’ Equity
Common stock, $1 par	130,000	115,000	[removed]	[removed]	%
Retained earnings	155,000	170,000	[removed]	[removed]	%
Total stockholders’ equity	285,000	285,000	[removed]	[removed]	%
Total liabilities and stockholders’ equity	$506,000	$440,000	$[removed]	[removed]	%

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Exercise 13-4

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Question 4

Operating data for Jacobs Corporation are presented below.

	2014	2013
Sales revenue	$800,000	$600,000
Cost of goods sold	520,000	408,000
Selling expenses	120,000	72,000
Administrative expenses	60,000	48,000
Income tax expense	30,000	24,000
Net income	70,000	48,000

Prepare a schedule showing a vertical analysis for 2014 and 2013. (Round percentages to 1 decimal place, e.g. 12.1%.)

JACOBS CORPORATION Condensed Income Statement For the Years Ended December 31
	2014			2013
	Amount	Percent		Amount	Percent
Sales	$800,000	[removed]	%	$600,000	[removed]	%
Cost of goods sold	520,000	[removed]	%	408,000	[removed]	%
Gross profit	280,000	[removed]	%	192,000	[removed]	%
Selling expenses	120,000	[removed]	%	72,000	[removed]	%
Administrative expenses	60,000	[removed]	%	48,000	[removed]	%
Total operating expenses	180,000	[removed]	%	120,000	[removed]	%
Income before income taxes	100,000	[removed]	%	72,000	[removed]	%
Income tax expense	30,000	[removed]	%	24,000	[removed]	%
Net income	$ 70,000	[removed]	%	$ 48,000	[removed]	%

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IFRS 13-1

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Question 5

Ling Company reports the following information for the year ended December 31, 2014: sales revenue $1,000,000, cost of goods sold $700,000, operating expenses $200,000, and an unrealized gain on non-trading securities of $75,000. Prepare a statement of comprehensive income using the one-statement approach.

LING COMPANY Statement of Comprehensive Income For the Year Ended December 31, 2014
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Problem 12-9A

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Question 6

Condensed financial data of Odgers Inc. follow.

ODGERS INC. Comparative Balance Sheets December 31
Assets	2014		2013
Cash	$ 80,800		$ 48,400
Accounts receivable	87,800		38,000
Inventory	112,500		102,850
Prepaid expenses	28,400		26,000
Long-term investments	138,000		109,000
Plant assets	285,000		242,500
Accumulated depreciation	(50,000	)	(52,000	)
Total	$682,500		$514,750

Liabilities and Stockholders’ Equity
Accounts payable	$ 102,000		$ 67,300
Accrued expenses payable	16,500		21,000
Bonds payable	110,000		146,000
Common stock	220,000		175,000
Retained earnings	234,000		105,450
Total	$682,500		$514,750

ODGERS INC. Income Statement Data For the Year Ended December 31, 2014
Sales revenue		$388,460
Less:
Cost of goods sold	$135,460
Operating expenses, excluding depreciation	12,410
Depreciation expense	46,500
Income tax expense	27,280
Interest expense	4,730
Loss on disposal of plant assets	7,500	233,880
Net income		$ 154,580

Additional information:

1.		New plant assets costing $100,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $26,030 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ODGERS INC. Statement of Cash Flows For the Year Ended December 31, 2014
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Adjustments to reconcile net income to
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Problem 12-10A

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Question 7

Condensed financial data of Odgers Inc. follow.

ODGERS INC. Comparative Balance Sheets December 31
Assets	2014		2013
Cash	$ 80,800		$ 48,400
Accounts receivable	87,800		38,000
Inventory	112,500		102,850
Prepaid expenses	28,400		26,000
Long-term investments	138,000		109,000
Plant assets	285,000		242,500
Accumulated depreciation	(50,000	)	(52,000	)
Total	$682,500		$514,750

Liabilities and Stockholders’ Equity
Accounts payable	$ 102,000		$ 67,300
Accrued expenses payable	16,500		21,000
Bonds payable	110,000		146,000
Common stock	220,000		175,000
Retained earnings	234,000		105,450
Total	$682,500		$514,750

ODGERS INC. Income Statement Data For the Year Ended December 31, 2014
Sales revenue		$388,460
Less:
Cost of goods sold	$135,460
Operating expenses, excluding depreciation	12,410
Depreciation expense	46,500
Income taxes	27,280
Interest expense	4,730
Loss on disposal of plant assets	7,500	233,880
Net income		$ 154,580

Additional information:

1.		New plant assets costing $100,000 were purchased for cash during the year.
2.		Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
3.		Bonds payable matured and were paid off at face value for cash.
4.		A cash dividend of $26,030 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors.

Prepare a statement of cash flows for Odgers Inc. using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ODGERS INC. Statement of Cash Flows For the Year Ended December 31, 2014
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Problem 13-2A

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Question 8

The comparative statements of Osborne Company are presented here.

OSBORNE COMPANY Income Statements For the Years Ended December 31
	2014	2013
Net sales	$1,890,540	$1,750,500
Cost of goods sold	1,058,540	1,006,000
Gross profit	832,000	744,500
Selling and administrative expenses	500,000	479,000
Income from operations	332,000	265,500
Other expenses and losses
Interest expense	22,000	20,000
Income before income taxes	310,000	245,500
Income tax expense	92,000	73,000
Net income	$ 218,000	$ 172,500

OSBORNE COMPANY Balance Sheets December 31
Assets	2014	2013
Current assets
Cash	$ 60,100	$ 64,200
Debt investments (short-term)	74,000	50,000
Accounts receivable	117,800	102,800
Inventory	126,000	115,500
Total current assets	377,900	332,500
Plant assets (net)	649,000	520,300
Total assets	$1,026,900	$852,800
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$ 160,000	$145,400
Income taxes payable	43,500	42,000
Total current liabilities	203,500	187,400
Bonds payable	220,000	200,000
Total liabilities	423,500	387,400
Stockholders’ equity
Common stock ($5 par)	290,000	300,000
Retained earnings	313,400	165,400
Total stockholders’ equity	603,400	465,400
Total liabilities and stockholders’ equity	$1,026,900	$852,800

All sales were on account. Net cash provided by operating activities for 2014 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

Compute the following ratios for 2014. (Round all answers to 2 decimal places, e.g. 1.83 or 12.61%.)

(a)	Earnings per share	$[removed]
(b)	Return on common stockholders’ equity	[removed]	%
(c)	Return on assets	[removed]	%
(d)	Current ratio	[removed]	:1
(e)	Accounts receivable turnover	[removed]	times
(f)	Average collection period	[removed]	days
(g)	Inventory turnover	[removed]	times
(h)	Days in inventory	[removed]	days
(i)	Times interest earned	[removed]	times
(j)	Asset turnover	[removed]	times
(k)	Debt to assets	[removed]	%
(l)	Current cash debt coverage	[removed]	times
(m)	Cash debt coverage	[removed]	times
(n)	Free cash flow	$[removed]

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Exercise 7-3

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Question 9

The following control procedures are used in Kelton Company for over-the-counter cash receipts.

(a) For each procedure, explain the weakness in internal control and identify the control principle that is violated.

Procedure		Weakness	Principle Violated
1.	Each store manager is responsible for interviewing applicants for cashier jobs. They are hired if they seem honest and trustworthy.	[removed]	[removed]

2.	All over-the-counter receipts are registered by three clerks who share a cash register with a single cash drawer.	[removed]	[removed]

3.	To minimize the risk of robbery, cash in excess of $100 is stored in an unlocked attaché case in the stock room until it is deposited in the bank.	[removed]	[removed]

4.	At the end of each day the total receipts are counted by the cashier on duty and reconciled to the cash register total.	[removed]	[removed]

5.	The company accountant makes the bank deposit and then records the day’s receipts.	[removed]	[removed]